Rumor: Facebook Wanted To Buy Twitter For $500 Million In Stock

According to Kara Swisher, Facebook wanted to buy Twitter for $500 million in stock. But the talks ended about 3 weeks ago when Evan Williams, founder of Twitter turned them down. Zuckerberg stated that he’s “really impressed by what they’ve done” at Twitter at the Web 2.0 Summit. Twitter is “a very elegant model.”

Some of the concerns regarding the transaction included how much Facebook’s stock was actually worth. Another concern was how the integration and cost structuring would work. Twitter also still does not seem to have a revenue plan.

Zuckerberg is also impressed with how Twitter has been able to take over the “status update” market. Many Facebook users update their status via Twitter, including myself.

To date, Twitter has raised $20 million in funding giving them a $98 million valuation. Twitter’s investors include Union Square Ventures, Charles River Ventures, Digital Garage, Spark Capital, and Bezos Expeditions. Marc Andreessen and Ron Conway are also investors in Twitter. Andreessen currently serves on the Board of Directors at Facebook.

The $500 million offer would have been based on Microsoft’s $15 billion valuation of Facebook. This figure was based on Microsoft’s $240 million investment in the social network.